PERSPECTIVES

Insights for chemical companies

Our Ojas Wadivkar discusses the role of digital and innovation in the chemical industry.

Ojas Wadivkar

Managing Director, Chemicals
Accenture

You recently joined Accenture as the chemicals lead for the U.S. Southwest Region. What is your perspective on the market?
I am truly excited about the potential of this market. The recent change of fortune for the chemical industry is just nothing short of amazing. Five or six years ago, North America was considered an import market, yet now we will be producing so much product that we will be net exporters to the world. Thanks to the shale gas revolution, the planned capital investment by the industry is over US$180 billion,1 with a large part of that in the Southwest Region. This makes me bullish.

As new plants come online and these new assets are married with the latest digital technologies, the world of intelligent plants becomes a reality. Chemical companies that embrace this change have an opportunity to push the boundaries of operational excellence and play a leading role in redefining the industry. Accenture is proud to be part of this transformation.

Do you see most of the industry change taking place at the plant?
With billions of dollars being spent on plants, both greenfield and brownfield investments, a significant amount of the change in the industry is emanating from the manufacturing side of the business. However, the change doesn’t stop there.

Many chemical companies are also embarking on full-scale digital transformation initiatives that impact the entire enterprise. It’s not just about producing the chemicals; companies also need to move all the product to increasingly demanding customers in different parts of the world where growth is expected. And, to complicate matters further, they face a workforce in transition as baby boomers retire and millennials are hired. As such, it is really a time of “all hands on deck” for the industry—across processes, systems and functions including finance, IT, HR, supply chain, R&D, and marketing and sales.

Accenture has made news recently about its focus on “Industry X.0.” What is Industry X.0 and what does it mean for the chemical industry?
Most are probably already familiar with the term “Industry 4.0,” which refers to the trend of applying the latest digital technologies to an industrial context with a focus on manufacturing. “Industry X.0” goes beyond that. It is the digital reinvention of industry, building on Industry 4.0’s core operational efficiencies and going further to leverage combinations of digital technologies to create new value in new places.

Technologies such as artificial intelligence, robotics and virtual/augmented reality will play a key role in allowing chemical companies to leverage big data in order to make the entire enterprise smarter, faster and more efficient. In fact, in our recent research we calculated that chemical companies can realize incremental savings in cost per employee of US$91,261, on average, through the optimal combination of technologies.2 Additionally, this combinatorial effect can help companies realize average market cap gains of an estimated US$4.5 billion.3

Most of the major chemical companies have started to realize some of this value as they’ve begun their digital transformation journeys. However, my observation to date is that many companies see digital as “a thing” to have or do—like sensors, predictive analytics, mobility or robotic process automation (RPA). Instead, there should be a focus on the key strategic drivers of why digital technologies should be leveraged and what benefits they can bring to the organization.

What is the role of innovation as chemical companies become digital, intelligent businesses?
Innovation has always been important to chemical companies, and that remains true during this period of disruption and digital transformation. It has been the case that some companies consider innovation as a “separate” function that sits outside of core operations. However, for digital transformation to be successful, a commitment to innovation and its quick adoption and scaling within the company must remain front and center.

In fact, integrated operations—that is, the combination of manufacturing, finance, supply chain, IT and other functions—are key to the adoption of an “intelligent” business model that helps companies take advantage of new growth opportunities and maximize profitability. The chemical industry is moving in this direction, which makes for exciting times!

Turning to life outside of work, how do you like to spend your free time?
I love to travel internationally and have visited many countries across the globe with my family. I am fascinated by diverse cultures and always try to understand the history of the places I visit. My goal is to someday become a member of the Travelers’ Century Club, a club for people who have visited 100 or more countries. I am only halfway there so I look forward to many future trips. As an avid non-fiction reader and a self-confessed sci-fi movie nerd, I manage to keep busy during my travels.

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